ISLAMABAD: China Three Gorges South Asia Investment Limited (CSAIL) has sought help from Prime Minister Office (PMO) for approval of interim relief tariff application of Karoot Hydropower Project from National Electric Power Regulatory Authority (Nepra), timely payment from CCPA-G and SBP approval of payment of loan to international lenders.
Wang Minsheng, Chief Executive Office, CSAIL, in a letter to Principal Secretary to Prime Minister, Dr Syed Tauqir Hussain Shah sought a resolution of issues being faced by the power company.
China Three Gorges South Asia Investment Ltd is an investment holding company formed by China Three Gorges Corporation (CTG) and is currently operating and developing six power projects in Pakistan, with total installed capacity of over 2600 MW having more than $ 6 billion of investment. These Projects include 720 MW Karot HPP, 1124 MW Kohala HPP, 640 MW Mahl HPP, and 3x50-MW Wind projects.
The 720 MW Karot Power Project on Jhelum River is under CPEC achieved Commercial Operations Date (COD) on June 29, 2022 and has contributed 1.8 billion KWh clean and green energy in national grid since its operations. Project has been financed by International Finance Corporation (IFC), China Development Bank (CDB), Export Import Bank of China (EXIM Bank) and Silk Road Fund (SRF).
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The Karot Power Company Limited is facing acute financial crisis as invoices are being submitted to CPPA-G on the reference tariff based on the 2016 exchange rates i.e. Rs 101.6/USD, which is almost 45% of the prevailing exchange rate, i.e., PKR 270/USD.
The company has claimed that after achieving COD, it has submitted an application for one time tariff adjustment on September 30, 2022, and the request for interim relief on October 28, 2022 to Nepra. After the approval of interim relief application by Nepra, the company will be entitled to invoice differential amount of Rs 18 billion from date of COD till December 31, 2022 based on actual exchange rate.
According to the power company, its second instalment of loan amounting to $ 79.2 million equivalent to Rs 22.176 billion (exchange rate of 280) will be due on April 21, 2022, adding that such loan repayment will only be possible upon the timely approval of the interim relief application by Nepra. Subsequent to the approval of interim relief tariff, the company will be able to raise differential invoices to CPPA-G, and pay second loaninstalment to international lenders, i.e., IFC, CDB, EXIM and SRF.
The company has further stated that it had incurred Rs 19 billion in operational activities including debt servicing, against which it had only received Rs11.6billion revenue from CPPA-G.
Considering the financial situation and upcoming loan payment to lenders, the power company has requested Managing Director PPIB to support and facilitate it in following matters: (i) timely approval of interim relief application from Nepra, so the company can raise differential invoice to Power Purchaser, i.e., Central Power Purchasing Agency (Private) Limited; (ii) timely payments by CPPA-G, once the company submits the differential invoice after approval of interim relief application to NEPRA; and (iii) State Bank of Pakistan to permit the repayment of loan as per the terms and conditions of the loan agreements registered with the State Bank of Pakistan.
Copyright Business Recorder, 2023